USDA Home Loans Blog

The minimum credit score needed for a USDA Loan is a 620 middle credit score. Two of three scores need to be 620 or above.

If you are in the 620 to 640 range you will be required to have a verifiable rental history for the past 12 months. Canceled rent checks for the last 12 months or a verification of rent from a real estate company will be required. All collections on your report must be paid.

If your middle scores are above 640, no rental history is needed and collections may not be have to be paid off.

USDA Home loans are popular for many reasons.

Buy a foreclosure or short sale with no money down. The USDA Loan program requires "no down payment." The only money you have to come up with is for the appraisal, which runs about $400, and your deposit when you make the offer on the home. These fund can actually be returned to you at closing as long as the appraisal comes in high enough. Go to your new home closing and get money back. It doesn't get any better than that!

Not just for rural areas any more. Many suburban areas qualify. Click here eligibility maps tab  to determine what areas of your state or county qualifies for this program.

 Buy a home with no money down for less than you can rent.

Great for first time homeowners and previous homeowners.

Perfect credit not needed.

Apply now for free.

 The only appliance needed in the kitchen is a stove. Refrigerators, dishwashers and microwaves are not required to obtain  USDA Home loans.

The home must be in good physical condition. The air conditioning and/or heating systems must be in working order.

Great news!!

USDA Rural Development has received funding for USDA loans from Congress through their 2012 fiscal year which ends September 31st, 2012.

Below is a copy of the memo.

SFH Origination Updates

From the National Office in Washington DC.

December 1, 2011

UPDATE - FISCAL YEAR 2012 COMMITMENT NOTICE!

Purchase funds that were received under the FY12 Continuing Resolution (CR) remain available. Therefore, Rural Development will continue to issue commitment authority for purchase transactions without interruptions for the remainder of FY12.

USDA Loans Require a minimum of a 620 middle credit score. That means that 2 out of the 3 scores must be 620 or above.

If you are in the 620 to 640 range you must be able to prove a rental history with at least 12 canceled checks or you must be paying a real estate company directly.

Also, all collections must be paid off.

If you are above 640, no proof of a rental history is required and collections may not have to be paid.

In both cases, you can't have any late payments in the last 12 months.

We have not received any solid information on when congress will appropriate funds for their new fiscal year which started Oct. 1st.

Rural development is still issuing conditional commitments. Conditional commitments are basically IOU's for when congress appropriates funds. There are some lenders, including ourselves, that are continuing to close and fund USDA Loans with the conditional commitments.

As soon as we hear that congress has fully appropriated funds I will post it here.

We have been notified that:

The USDA Rural development will not be funding loans from Oct. 1st thru Oct. 11th. They will use this time to retool their systems for the new fee structure.

There is a possibility of funding issues after the 11th if congress does not appropriate funds on time.

Those of you that are house hunting or applying now should be fine because it takes 30-45 days to close a USDA Loan and all fund issues should be resolved by then.

New USDA Loan fee structure starting October 1st, 2011.

The funding fee will be dropping from the current 3.5% of the loan amount to 2%

There will now be an annual insurance premium of .3% of the current loan balance. So on a $100,000 USDA mortgage the monthly mortgage insurance would be $100,000 x .3% =$300. Divide the $300 by 12 and the monthly mortgage premium would be only $25 per month.

USDA Home loans will still be the only "No Money Down" option available besides VA which of course you have to be a veteran to take advantage of this program.

With the USDA Loan the seller can pay all of your closing costs including homeowners insurance or the loan amount can be raised to cover all costs as long as the home appraises.

Typically your only out of pocket expense will be for the appraisal which can be reimbursed at closing.

Plenty of funds remain for the USDA Home Loan program, See the USDA memo below.

SFH Origination News

From the National Office in Washington DC

Single Family Housing Guaranteed Loan Program

August 4, 2011

GUARANTEED LOAN FUNDING UPDATE:

OVER $11.2 BILLION DOLLARS AVAILABLE FOR GUARANTEED LOANS!

The Single Family Housing Guaranteed Loan Program (SFHGLP) was allocated $24 billion dollars for Fiscal Year 2011 (through September 30, 2011). Due to tremendous support from our lending and real estate professional partners over $12 billion has been obligated nationwide.

SERVE RURAL HOMEBUYERS! While program demand and volume have heated up with the summer temperatures, ample funding remains available! Homebuyers have no obstacles to funding for fiscal year 2011!

LEND WITH CONFIDENCE! Future Guaranteed Loan Funding Updates will continue to be released in order to keep our lending partners informed of available funding levels. Rural Development may obligate fiscal year 2011 funds until the close of business September 30, 2011!

As of August 3, 2011:

TOTAL $ OBLIGATED: $12.8 BILLION

TOTAL # LOANS: 100,075

OVER $11.2 BILLION USDA Mortgage Funds REMAIN TO SERVE RURAL HOMEBUYERS!

Good news!!!

The maps may not be changing after all. We were notified that none of the USDA eligibility maps in Florida will be changing in the near future. We have not heard about the other states yet. We will keep you posted when we hear anything else.

Click here to check the USDA eligibility maps. USDA eligibility maps

USDA rural development has 13 billion dollars left for USDA home loans thru their fiscal year which ends September 30th 2011.

See the memo below from USDA rural development.

SFH Origination News

From the National Office in Washington DC:

May 26, 2011

GUARANTEED LOAN FUNDING UPDATE: HELP WANTED!

$24 BILLION DOLLARS ALLOCATED FOR GUARANTEED LOANS!

$24 billion dollars is available in Fiscal Year 2011 (through September 30, 2011) in the Single Family Housing Guaranteed Loan Program (SFHGLP). To utilize these available funds, WE NEED YOUR HELP!

SERVE RURAL HOMEBUYERS! In the past, funding shortages due to overwhelming volume and program demand may have prohibited some homebuyers from utilizing the SFHGLP. Fiscal year 2011 will be different! Congress responded to lender requests for more funding and delivered $24 billion for the current fiscal year!

LEND WITH CONFIDENCE! Future Guaranteed Loan Funding Updates will continue to be released in order to keep our lending partners informed of available funding levels.

As of May 26, 2011:

TOTAL $ OBLIGATED: $9.2 BILLION

TOTAL # LOANS: 70,759

OVER $15 BILLION REMAINS TO

SERVE RURAL HOMEBUYERS!

Thank you for your support of the Single Family Housing Guaranteed Loan Program!

Current USDA mortgage rates.


 

The eligibility maps for USDA Home Loans is going to change.

The USDA is in the process of changing their eligibility maps.  Many of the areas that qualify now will not when the changes are made. It has been years since the maps have been updated and many areas that used to be rural are now suburban.

This is one of the only "No Money Down" mortgage options out there. This will eliminate the opportunity for many to purchase a home.

If you are even thinking about taking advantage of the low home prices and interest rates now is the time to do something before the changes are made to the USDA home loans.

Check back at our USDA Home Loans Blog for more information as it develops.

What loans are offered by the USDA?
The USDA provides 30 year mortgages with fixed rates for the duration of the loan.  These mortgages allow borrowers to borrow as much as 103.5% of the appraised amount of the home.  This can allow people to add in closing costs with the purchase price as long as the home appraises.

What properties are eligible for the USDA loans?
A single family home in which the borrower intends to live as their primary residence.  In addition, condos are also allowed.  The main requirement is that the home must be located within an eligible area allowed by the USDA.  You can click the eligibility maps button on the top of this site to determine eligible areas in your county.

How much will the USDA allow for a home purchase?
This is based on income and debts.

Who is eligible for the USDA mortgages?
There are a few items required by the USDA for potential homeowners.

• Adequate credit history (usually not as strict as conventional loans).
• Home must be in an eligible area. The person’s income cannot be more than 115% of the average income of the borrower’s area.

What are some of the advantages of the USDA loan over other types of loans?
One of the most attractive features of the USDA loan is the ability to finance 100% of the purchase price.  In addition, USDA does not require monthly mortgage insurance premiums like FHA and conventional loans.  Since the rates are usually competitive with other types of mortgages this means that borrowers can get extremely affordable payments on a home with no down payment. USDA home loans are great first time home buyer loans.

Below is part of a memo sent out by the USDA...

Implementation of an annual fee of 0.30 percent of the outstanding principal balance, will allow the Agency to reduce the up-front guarantee fee. Therefore under the new rule, effective October 1, 2011, the up-front guarantee fee for purchase transactions will decrease from 3.5 percent to 2 percent for purchase loans transactions. The up-front guaranteed fee for refinance loans transactions will remain at 1 percent.

The annual fee and upfront guarantee fee are subject to change annually to maintain a subsidy neutral program.

 

Now is a good time to secure USDA home Loan financing to avoid these changes.

Can I purchase a foreclosure with a USDA Home Loan???

Absolutely! This program can be used to purchase a foreclosure or short sale and you can purchase with "No Money Down".

Your purchase can be structured so the seller pays all the closing costs and other items like homeowners insurance.

Your only out of pocket expense will be an appraisal, which is $350-400, and whatever deposit you give the realtor as a deposit on the home. Both of these can be refunded to you at closing making this a true "No Money Down Loan" program.

Will I qualify for a USDA Loan.

Would I qualify for a "No Money Down" USDA Home Loan?
If you have decent credit, at least a middle credit score of 620, and want to purchase in an eligible area, this is the program for you. Check the eligibility maps out on our site www.USDAHomeLoans.biz . Also, check the income limits for your county. They are usually... around $75000 for a family of up to four and $95000 for a family of 5-8.

Can collections stop you from getting a USDA Loan?

The answer is yes and no. Medical collections are typically overlooked. Utility bills must be paid. Any electric company's, water company's, satelite or cable TV collections must be paid. Also cell phone collections must be paid.

USDA Home Loan Program

USDA loans used to be the best-kept secret, but now this loan program has momentum. It's so popular that they ran out of their budget earlier in 2010, although Congress has restored funding now. The only negative to this loan at all is the fact that not every property and not every individual qualifies. You must check eligibility maps to determine what area qualifies. But if someone does qualify, there is no reason not to take advantage of this program."

The USDA home loan program can be a great choice for first time home buyers because of the reduced down payment or no down payment requirements and lower credit scores accepted.